Payroll teams are under increasing pressure – to stay compliant with changing regulations, support workforces that are expanding beyond borders, and provide employees with a consistently smooth experience. But as this complexity grows, the talent pool of payroll professionals is reportedly shrinking.
To do more with less, organizations are turning to AI. But these tools are not just filling gaps and boosting efficiency. They’re changing the very structure of the payroll function, enabling teams to focus on the strategic work that the modern company needs.
AI is fixing payroll errors before they happen
With less payroll expertise on the team, companies are relying more on the ability of payroll technology to reduce errors. But new AI solutions do more than just automate calculations and data entry — they anticipate mistakes before they happen, catch anomalies in real-time and even correct errors automatically.
This is allowing payroll teams to move from a reactive to a proactive approach. As Michael Nierstedt, Product Director of Payroll at Multiplier describes, “By catching issues before they escalate, teams can free up time to focus on more complex and strategic issues.”
Staying compliant is getting easier (at last)
As businesses expand into new markets, staying on top of local tax laws, wage regulations and reporting requirements has become a full-time job — yet payroll teams lack the resources to keep up. Almost half of companies pointed to global payroll compliance as a major challenge in 2024.
AI solutions are allowing organizations to navigate this complexity, helping teams cover more ground with fewer team members. Global payroll platforms with AI analyze a wide set of data points to flag potential issues – looking at historical payroll records, regulatory changes and evolving market conditions across countries and industries to identify patterns and alert payroll teams.
These solutions are turning reactive firefighting into proactive risk management. As Nierstedt explains, “AI is empowering payroll teams to lead rather than react, responding to issues before they escalate.”
AI is supporting employees when staff can’t
As governments develop more complex payroll and tax compliance requirements, payroll departments are being stretched more than ever. And AI is filling gaps where payroll teams simply don’t have time to support employees. 3 in 10 companies now use a payroll system with an AI agent to provide efficient answers to queries.
Employees want to know how their pay is calculated, what deductions mean and increasingly, that they’re being paid fairly. With pay transparency requirements evolving across regions, payroll teams are under pressure to proactively identify and justify any disparities.
AI solutions are leading the change here – analyzing payroll data to give teams the insights they need to inform competitive and equitable pay practices. As Nierstedt explains, “AI tools have the advantage of being able to aggregate and analyze wide amounts of information at once – a task that understaffed teams simply cannot manage.”
By looking at salary data, tenure and industry benchmarks, AI can spot trends and uncover actionable insights that help organizations identify pay inequalities – using pattern recognition to highlight underlying causes, such as differences in starting salaries or fewer performance-based raises.
The next generation of payroll starts here
Gone are the days when payroll was a transactional process. With AI, it’s now a strategic lever that can be used to drive employee trust, operational efficiency and competitive advantage.
With the right tools, payroll teams can respond proactively to potential errors, compliance issues and changing legislation – helping businesses protect both employees and the bottom line.
